When a 2 Percent Increase in Price Generates a Greater

question 49

Multiple Choice

When a 2 percent increase in price generates a greater than 2 percent decrease in quantity demanded, then:

• A) demand is price inelastic.
• B) total revenue increases.
• C) demand is positively sloped.
• D) demand is unit elastic.
• E) total revenue decreases.

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Definitions:

Confirmation Bias

The tendency to search for, interpret, and remember information in a way that confirms one’s preconceptions, leading to statistical errors.

Public Opinion Poll

A method used to gauge public opinion by asking a random sample of people questions on various topics.

Sexual Harassment

Unwelcome or inappropriate sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.

Representativeness Heuristic

A cognitive shortcut that involves judging the probability of an event by its similarity to a prototype or an example.